It’s a common misconception that modernization in the insurance space means carriers have to cede ground and relinquish control. This couldn’t be further from the truth.
The fact is that control is not a zero sum game. The same tools that make life easier for customers also empower carriers to optimize, grow revenue, and adapt quickly to changing markets. Everybody can win.
In this month’s newsletter we’ll talk tech, data, and the false dilemmas that can arise when carriers move to modernize.
Striking a balance between instant and human underwriting
Meeting the modern insurance customer where they’re at means implementing the digital processes that people have come to expect in all aspects of their lives. However, I’ve found that carriers can be misled into believing that modernizing inherently means less control and higher risk.
I want to lend my experience in this realm to talk about why this is a false dilemma.
Instant underwriting has, without a doubt, expanded insurance access to millions, and many carriers have been able to leverage this technology to grow their applicant pool and revenue. But while some carriers hear “instant underwriting” and think “simplified,” it’s much more accurate to say “efficient.” I encourage you to read more about this distinction in a piece I recently published with Life Annuity Specialist.
The top-level takeaway for instant underwriting is that it addresses the different personas who apply for life insurance in a way that matches their needs and status. As an example, carriers can save time and money by asking fewer questions and pulling fewer data if the applicant has indicated they are an extremely healthy 22-year-old. Carriers also then eliminate the need for other costly steps like medical records.
While it’s been a revelation, it’s also important to note that instant underwriting is not the only option for the modern insurance company.
Carriers who want a bit more human control can opt for an applicant flow called “refer-to-underwriter.” This hybrid approach allows carriers to leverage the digital intake process of instant underwriting while creating an off-ramp for applicants that may require the keen eye of an underwriter to help them become insured. The best part is, this subset of applicants is established by your own rules and risk tolerance.
Incorporating refer-to-underwriting allows more applicants to secure coverage that otherwise may not have been attainable.
Ultimately, the most important thing is for carriers to find the right balance that minimizes risk while also ensuring that as many people as possible are able to apply for life insurance.
Q & A with Adrian Warwick, VP Marketing Technology and Operations
Q: I’m hearing a lot about “enriched data,” but what does that actually mean?
A: “Enriched data” can mean different things to different companies. When Bestow says “enriched data,” here’s what we mean and why it’s important for carriers.
Data often exists in silos — bits of information in a container sequestered from other information. So it’s not extremely useful by itself. The process of enrichment is really about connecting multiple silos together so that they share information. Pulling from multiple data sources, we can then analyze and organize to build a more three dimensional picture of a customer.
Enriched data means highly actionable insights that can help carriers do things like, for example, efficiently target customers and match them to the appropriate insurance products. This optimization can have the dual benefit of reducing customer acquisition and underwriting costs while also growing revenue through effective audience identification.
